Multiplatform buys can lead to disruption for buyer, seller

If there's one thing we've learned from the dot-com fiasco, it's that the next new thing can end up being the next old thing pretty fast. So forgive me if I sound a cautionary note or two about the latest next new thing-the so-called multiplatform ad deals that are captivating the industry and are the driving force in media mergers of all sizes and shapes.

Never mind that most sellers and buyers aren't set up to evaluate and execute such deals, which typically include whatever the seller has to sell, wrapped in a seamless package to promote a brand or a group of brands, a corporation, movie tie-ins-whatever. And never mind that such deals have the capacity to create friction between client and agency. Media sellers often bypass the agency and pitch the packages directly to top management at clients. Some big companies such as IBM have integrated marketing departments in place to scrutinize multimedia extravaganzas, but most don't.

What worries me more is media conglomerates being tempted to water down their journalistic and entertainment enterprises to attract the biggest possible numbers to include in multiplatform deals. The premise of such cross-media buys is to collect as big an audience as possible-and as the deals become more prevalent, individual reader and audience characteristics will become increasingly irrelevant. Maybe that's why the newsweeklies have become more and more feature-oriented-to attract larger and larger audiences of general-interest readers and to avoid alienating corporate and even governmental sponsors.

AOL Time Warner recently found itself in just such a mess. At the same time that Fortune was sponsoring its Fortune Global Forum in Hong Kong, the Asian edition of its sibling publication, Time, was being banned on newsstands in China for carrying an article on the outlawed Falun Gong religious sect.

Invitations to such top-level meetings as the Fortune Global Forum are often tied to broader ad deals. Because such deals sometimes encompass several properties within a media enterprise, there's a strong temptation to avoid unpleasantness-especially since one controversial article or program could jeopardize hundreds of millions of dollars in cross-media contracts. The bar has definitely been lifted, and journalistic considerations could become an afterthought in such high-stakes games.

As if we needed another rationalization for media mergers, the prospect of broader multiplatform deals is definitely a compelling one. The recent elevation of NBC President Bob Wright to NBC chairman acknowledges that Mr. Wright will concentrate much of his efforts expanding NBC.

But one of the Peacock Network's great advantages is that it doesn't have the diversions of the other networks and is freer to concentrate on creating great programming. Now the pressure is building for NBC to expand-"if, that is, it continues to compete with media of far greater size," as The New York Times put it the other day. "For these guys, it's either grow or die, grow or sell," a former NBC executive, now a media analyst, told the Times.

Or, then again, NBC could keep doing what it's doing. By putting its considerable firepower against superior programming (where it can be sold into syndication in a few years for really big bucks), NBC can make more money than by buying a movie studio or more cable networks. Sure, if NBC owned a movie studio that produced TV shows, the other studios might not be so inclined to charge NBC an arm and a leg for hit shows (as Warner Bros. did for "ER") for fear of retaliation. But I submit it would be far less aggravating in the long run for NBC to pay top dollar for top programming and avoid the considerable time and trouble of running a studio.

There's something to be said for sticking to a business you know and that you're good at rather than acquiring units to plug into a multiplatform ad deal or so you can get cheaper programming. At best, across-the-board ad sales will account for 10% or so of total ad revenue for a media conglomerate. Do buyers and sellers really want to turn themselves inside out to accommodate a minor but very disruptive part of their business?